United Nations plans blockchain adaption for climate change

United Nations (UN) Climate Change secretariat has initiated and facilitated creation of Climate Chain Coalition (CCC), a multi-stakeholder open initiative to use blockchain technology for driving positive climate change action. The partnership includes at least 32 organizations.

The overall term climate action encompasses aspects that have high complexity, for e.g.:

National governments of countries that were parties to the 2016 Paris Climate Agreement have publicly committed to Sustainable Development Goals (SDGs), action corresponding to which will need to accurately tracked. National governments can be held accountable to their SDGs only based on accurate recording and reporting of the climate actions.

A giant project of such high complexity obviously requires appropriate technology foundation, and the technologies that hold key to the success of climate action are Internet of Things (IoT), Big Data, and blockchain.

IoT is a technology in which machines can communicate between themselves. Physical devices such as vehicles or home appliances are embedded with electronics, software, Radio-frequency identification (RFID), and network connectivity, allowing the devices to exchange information. Each device can be uniquely identified, while the embedded computing system is able to transmit data over the existing Internet infrastructure.

Big data increasingly refers to predictive analytics or similar advanced data analytics, instead of just enormously large data sets of increasingly complex unstructured data. Billions of IoT-enabled devices all over the world will generate immense volume of complex and unstructured data sets on the impacts of climate actions. Big data will allow us to make sense of this data, i.e. whether climate actions are producing desired outcomes at all.

After gathering large data sets using IoT, and analysing them using big data, comes the next part of accurately recording the outcomes, and reporting them in a transparent manner. This is to ensure that stakeholders such as national governments and industries can be held accountable to their respective SDGs and NDCs. After all, if different national governments refer to different versions of the same “truth”, then it is quite possible that a particular national government could perceive that its contribution to sustainability is not being recognized. Continued opacity of reporting over such actions could jeopardize trust and brake down the Paris accord. Worse still, in developing countries, which must industrialize to remove poverty, and at the same time must adhere to their SDGs, might develop serious fissures, i.e. citizens of such countries might see their national governments lacking the ability to protect their legitimate interests. A comprehensive system that can accurately record climate actions, climate financing transactions, GHG emission, and carbon asset trading is then absolutely required, a system that can’t be hacked or manipulated by vested interests.

It’s in this question of transparency, where blockchain holds significant promise. Blockchain is a technology where a network of computers maintain a shared, verifiable, and permanent record of data. In this distributed database each node is considered as a ledger, and the entire database is maintained by all nodes. Changing or deleting an existing block is not possible, hence, to update a blockchain, a new block has to be created. To create a new block, each “Miner”, i.e. the combination of powerful software, specially designed hardware, and their user, has to provide proof of work (POW) for the last recorded block in the blockchain, using a massive number-crunching operation done at high speed. This is in an environment where many other miners are also doing the same, which makes it more difficult for any miner to provide POW. This makes updating blockchain very hard, i.e. only when a miner provides proof of very significant number-crunching work done, he/she gets to create a new block. Hence, hacking blockchain is not economically viable. It’s the underlying technology of Bitcoin and other cryptocurrencies like Ethereum.

CCC expects to apply blockchain in the following broad areas:

Improve carbon emission trading,

Support clean energy trading through encrypted tokens,

Ease flow of climate finance,

Improve GHG emission tracking and reporting,

Catalyse growth of green start-ups by allowing them to bypass the constraints of traditional banking systems.

UN’s recognition of the potential catalyst role blockchain technology could play in the matter of climate action comes at a time when other government institutions elsewhere are also warming up to this technology. For e.g. National Institution for Transforming India, or NITI Aayog, the premier think tank of the Government of India (GoI), is building the largest blockchain network in India, called IndiaChain, to be used in areas such as agriculture, property record management, education, evidence record management, and multi-factor authentication.